After the National ID System, universal bank accounts?

By Jose Antonio Cangco

The Covid-19 pandemic has drawn into the news the need for the National ID System as a means of identity verification during a crisis. 

Before there was any hint of a worldwide pandemic, President Duterte already signed on August 6, 2018, Republic Act 11055 or the Philippine Identification System Act (PhilSys Act). The ID system will centralize demographic and biometric information of all Filipino Citizens and resident aliens. It will generate a unique lifetime PhilSysNumber that the ID holder will use for all his government and private transactions. The Philippine Statistics Authority (PSA) issued the implementing rules and regulations with the primary objective of the system to “provide a valid proof of identity for all citizens and resident aliens as a means of simplifying public and private transactions; a social and economic platform which shall serve as “the link in the promotion of seamless service delivery, enhancing administrative governance, reducing corruption, strengthening financial inclusion, and promoting ease of doing business.”

The information to be collected are demographic data: full name, sex, date of birth, place of birth, blood type, address, Filipino or Resident Alien, and optional information such as marital status, cell  phone number, and e-mail address. The biometric information is interesting. Aside from the front face photograph and a full set of fingerprints, an iris scan of the eye will be made.

The iris is a membrane in front of the eye, which regulates the amount of light going inside. It can be colored blue, brown, green, grey, or in Asians, black. Iris scanning uses a camera and statistical algorithms to capture and store an image of the iris. The iris has more details than the retina, hence is more secure compared to a retinal scanning.

This factoid aside, the urgency of the National ID System was brought to the front during the Covid-19 pandemic. The whole of Luzon was put under the enhance community quarantine. The social amelioration program (SAP) to give a P5,000 to P8,000 cash subsidy to each qualified household in affected sectors of the community was implemented, but suffered delays due to discrepancies between the databases of the national government and the local government units that were tasked with the actual cash distribution.

Could we have done better in distributing the SAP aid? I think so. The Philippine ID system is a logical and practical act to have a unified ID system that will make transactions faster, more convenient and secure. But to prepare for another pandemic, crises, or catastrophe brought by viruses, typhoons, drought, flooding, and earthquakes that cause massive destruction, suffering, and loss of life, we need to reach our people and those heavily affected in the correct manner and span of time.

Not all forms of aid are given in the likes of food packs, food coupons, gift checks and EMV cards. These kinds of aids might not be practical in terms of logistics and manpower use. They could be prone to errors, delays, wastage, spoilage and corruption. Initiating a bank account for all Filipino citizens and alien residents who are ID holders under the Philippine Identification System Act should speed up future distribution of any cash aid, ensuring that the correct amount would be received by the intended beneficiary.

In 2019, only 35 percent of adult Filipinos have bank accounts. To require Filipinos who have been issued with the unique PhilSys Number to open formal bank accounts would boost financial connectivity in the country. This would help the BSP achieve its target to cut the percentage of unbanked Filipinos by doubling the number of bank account holders to 70 percent in 2023.

There would be new rules for this kind of bank account: no minimum deposit required, no transaction fees to be collected, no automatic closing for dormant accounts, and allowable transfer of the branch where the account was opened in case the account holder moves to another city or region.

Residents in remote towns and barangays without banks have the option of going to the local government units (LGU) or to the banks nearest them, where they could claim their cash aid anytime during the day or night, seven days a week. Also, the officer or person evaluating the qualifications of the intended beneficiary has no easy physical access to the cash, removing the temptation that could lead to theft and corruption.

If another pandemic, catastrophe or disaster should strike, the LGU or the assigned DSWD unit evaluating the affected residents would find their task easier. After the interview and confirmation, it would then just be a matter of submitting the list of names of qualified beneficiaries together with their respective PhilSysNumber and bank account for the transfer and credit of their cash aid. The correct and full amount would be recorded and given.

Therefore, I think a bank account should be considered as an integral part of the National ID System. 

Jose Antonio Cangco has a Business Management degree from the Ateneo de Manila University and an Accounting degree from PSBA, QC. He contributed articles on ancient eastern knowledge and other subjects to the Philippine Panorama from May 2006 to December 2013. He also worked as an online editor, translator and writer on regulatory compliance at EBAR Abstracting Co. Inc., which supplies web content to He is now retired.

Image Credits: Daniil Peshkov |

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